Palmdale man convicted in million-dollar public assistance fraud case

PALMDALE – Following three days of deliberations, jurors Thursday convicted the mastermind behind a massive child care fraud ring that depleted the public treasury of more than $1.4 million.

Demetrius Eugene of Palmdale – a former employee of the Department of Incorporations within the California Secretary of State’s office – was convicted of five counts of grand theft and six counts of perjury, according to the Los Angeles District Attorneys Office.

Jurors also found true an allegation that Eugene stole more than $200,000. The cumulative loss attributed to Eugene’s conduct is $1,404,070.

Authorities say Eugene set up four home-based child care centers under the name Home Sweet Home Day Care Inc. with family members and friends listed as purported childcare providers for each business.

Eugene and his associates offered 38 welfare recipients monetary kickbacks, prompting these individuals to apply for subsidized childcare. Eugene and his cohorts falsified paperwork to create the illusion that these people were employed by Home Sweet Home Day Care as maintenance workers. But authorities believe very little legitimate childcare was provided and the parents were not employed.

The scheme was operated from an office at 2050 W. Florence Ave. in Los Angeles, where parents receiving aid signed attendance sheets and picked up kick-back checks.

Parents on the Home Sweet Home Day Care payroll – 70 percent of whom admitted to knowing about the scheme – received roughly $300 per child and were assigned titles based on the number of children reported as needing childcare. For instance, while one child earned parents the title of Maintenance Worker I, four or more children earned the parents the title of Supervising Maintenance Worker.

During the criminal investigation, District Attorney investigators found that most of the homes serving as childcare fronts were licensed for 14 children but were only large enough to accommodate six. Investigators also discovered that, in some instances, children who were allegedly being cared for by Home Sweet Home Day Care providers did not live in the state.

Eugene, 40, was originally charged in four public assistance fraud cases filed in 2008, then proceeded to enter a guilty plea in his last pending consolidated case involving three of the original cases filed. Eugene also pleaded to three counts of grand theft and admitted an allegation that he took more than $500,000. He was acquitted of a single count of grand theft.